CARACAS – Venezuela’s battered economy is one of the key battlegrounds in Sunday’s presidential election, with President Nicolás Maduro hoping to convince voters that the country has turned the corner after years of strife.

Thanks to his recent efforts to push down the cost of living, the outlook is slightly rosier. In February, Venezuela finally said goodbye to the rampant hyperinflation that had seen price rises peak at more than 400,000% a year in 2019. Now annual inflation is more manageable, but still high at about 50%.

Mr Maduro has been keen to take credit for the fall, saying it shows that he has “the correct policies”. Unfortunately, however, those policies have done little or nothing to tackle the economy’s underlying structural problems – chiefly, its historic dependence on oil, to the detriment of other sectors. “Since it was discovered in the country in the 1920s, oil has taken Venezuela on an exhilarating but dangerous boom-and-bust ride,” as the US Council on Foreign Relations think tank puts it.

Now opponents of President Maduro are pinning their hopes of economic revival on a change of leader, and a new beginning under his electoral rival, Edmundo González. “An opposition victory would lead to a renewed opening of Venezuela’s trade and financial ties with the rest of the world,” says Jason Tuvey, deputy chief emerging markets economist at Capital Economics.

That would also mean the end of US economic sanctions imposed after Mr Maduro’s victory in the 2018 presidential election, which was widely dismissed as neither free nor fair. These have made it difficult for state-run oil company PDVSA to sell its crude oil internationally, forcing it to resort to black market deals at big discounts. But Mr Tuvey cautions that reversing the economic collapse of the past decade will be a tall order, given the enormous investment needed to raise oil production and with peak oil demand approaching. “Venezuela’s economy can never get back to where it was 15 to 20 years ago,” he tells the BBC. “It will be starting by and large from square one.” (BBC)…[+]